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Did video gaming expansion boost municipal revenues in Illinois?

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  • Gary A. Wagner
  • Douglas M. Walker

Abstract

One supposed benefit of authorizing video gaming terminals (VGTs) outside of casinos is to improve the fiscal health of local governments. Illinois passed the Video Gaming Act in 2009, enabling individual municipalities to allow VGTs. To date, the machines have generated $400 million in municipal tax revenues and $2 billion for the state. We use a difference‐in‐differences strategy that adjusts for staggered adoption to isolate the causal effect of VGTs on municipal revenues. We find that VGTs displace other local taxable retail, leaving total municipal revenues unchanged. The video gaming act merely reallocated economic activity and did little to improve municipal finances.

Suggested Citation

  • Gary A. Wagner & Douglas M. Walker, 2021. "Did video gaming expansion boost municipal revenues in Illinois?," Southern Economic Journal, John Wiley & Sons, vol. 88(2), pages 649-679, October.
    • Handle: RePEc:wly:soecon:v:88:y:2021:i:2:p:649-679
    DOI: 10.1002/soej.12537
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    References listed on IDEAS

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